El Salvador is a small country and the Bitcoin they are holding is a small quantity compare to what other institutional investors are holding. I'm not really sure about how influencer there position is in crypto and outside but their country GDP is low and don't have their own currency, so one can't really balance the country development when they letter change to USD as their official currency because of the high inflation they are dealing with that time.

Having Bitcoin as part of their country reserved is what other countries that are dealing with high Inflation can deal with but there is consequences, I remember some of his tweets and people that were coming for him when Bitcoin price fell the last time and he even stop tweeting about Bitcoin but he came back with strong hands immediately Bitcoin broke all time. Their exit though wouldn't do much to Bitcoin, our worries should be Blackrock and Microstrategy that has more than 3% of the total supply.

In the short term it will definitely create panic so that it will put the market back under pressure and this is caused by a bubble that might make the market a little volatile.
But in the long term the theory may be different because bitcoin is not influenced completely by anything and even the market reaction cannot be controlled and occurs beyond many people's expectations.
El Salvador understands what they are doing but in the long term they just want to turn the investment into a higher value and maybe they are also planning their strategy to collect more.

Germany did it and maybe there is a picture of what happened to bitcoin, then it just formed a little bubble that would cause panic in the market in the short term and after that bitcoin found its recovery point again.

Germany never wanted its bitcoin anyway, so it was going to sell eventually. But El Salvador wants to keep this for the long term, so I doubt they would sell off large parts of their reserves at once.

Even if they do that, who doesn't want an opportunity to buy the dip? (Besides chronic bitcoin haters, that is. But normies would relish the chance to buy sub-70K bitcoin again).

Yeah, two different situations.
Germany didn't have a choice as to what to do with their seized bitcoins.
Whereas El Sal is in full control here - and they did it successfully as for now.

Interesting points.

Bitcoin adoption map looks better with time but it can change in future with development and launch of CBDCs from many countries. They will co-exist but pressure from governments will increase with time because they want citizens to use CBDCs, more than use Bitcoin.

Status of Bitcoin legality, CBDCs, and cryptocurrency regulations are available in some maps.
Some world maps for Bitcoiners

I don't know about Constitution of El Salvador on Presidency terms. I guess it is not a nation that allows a President can work forever at that position without any restriction on max terms a person can be their President.

Bukele will turn to be a dictactor if he is allowed to be El Salvador's President forever. Nothing good with a dictator as history proves it.

The truth is that there is no way you will share the history of Bitcoin today without mentioning the impact of El Salvador no matter how little because it's the number one country attached to Bitcoin even as Bitcoin has helped the name of the country to be known the more and mentioned daily and has also improved its tourism which wouldn't have been possible without legalizing Bitcoin. Upon these, nothing sizable will happen if El Salvador sells its Bitcoin, they have too little to drive the market insanely lower.

I guess this is a hot topic since I opened a thread on the exact same subject a few weeks ago.

Here are my conclusions from that thread, just to save you all some trouble  :

1. 60% of people here believe, absolutely positively, that:
    a) Bitcoin will never ever ever ever go down in value (the first asset in human history to do so).
    b) An overwhelming majority of the citizens of El Salvador believe this.
    c) Governments like El Salvador are free from corruption and always act according to the logic
        of their beliefs, and would never, for instance, sell off the country's Bitcoin to line their own pockets
        or pay off a budget shortfall.

2. 30% of people here believe that El Salvador doesn't matter at all.

3. 10% of people here believe that it could drop the price of Bitcoin significantly, or even set off a panic.

Personally I am somewhere between #2 & #3.

The only thing I would add is that since there's so much focus on El Salvador, all of the world's salesmen from other non-Bitcoin currencies are probably camped out in their capital 24/7 trying to sell them alternatives to BTC. For me this adds a similar risk to them simple selling their Bitcoin: choosing another product instead. If that happened, that could be even worse for Bitcoin than if they simply sold it.

But this is only a small part of the impact that will be caused because even though in the end El Savador will still be known as a country that does adopt bitcoin but in the end when they release the bitcoin they have the situation remains the same in terms of influence because this will only have an impact for the short term so it will not cause any turmoil for the long term because when their short impact is felt in the market after that it is forgotten just like some cases of other countries selling their bitcoin such as Germany some time ago or some news about China that banned bitcoin and legalized bitcoin again.

The impact will still not be as big as expected for the long term because after all bitcoin will remain the same without being affected by everything related to the benefits of one party even though it cannot be denied that there must be an impact but we don't need to worry about it for the longer term because everything will be the same as usual.

This topic has a similar thread here but to answer the question, if they sold their bitcoins it could make a temporary crash due to people panic selling. But don’t forget that the current situation right now for BTC is pretty solid, meaning if someone’s out, another will go in, a country or any group will definitely take advantage of the market. We are on the move of making BTC as a global market asset, el salvador could be influential at some point that could cause a crash but rember that their holdings isn’t that much like US and other countries.

I do hope that there will be no regression in Bitcoin developments in El Sal. It's the country that started it all and became history already, but it would be better to see this history become even longer and more legendary regarding the adoption of crypto and Bitcoin.